Monday, February 27, 2017

Is help on the way for advisers fighting elder abuse?

Advisers, brokers and financial firms may finally receive legal cover
if they report incidents where they believe elderly clients might be
the victims of financial abuse.

Lawmakers from both sides of the
aisle are trying to build momentum behind the Senior Safe Act, which
also has the backing of organizations such as the Investment Adviser
Association, SIFMA and the Insured Retirement Institute — trade groups
that are not always aligned on other public policy issues.

What
unites them in this case is a common challenge. Their member firms all
work with senior clients who might be targeted by financial scammers.
Regardless of a firm's business model, determining how to respond when
an elderly client might be the victim of abuse is a tricky question. Too
often, senior advocates say, those incidents go unreported.

"One of the biggest problems we've had with financial
institutions is making these reports," Diane Menio, executive director
of the Center for Advocacy for the Rights and Interests of the Elderly,
said last week at a Senate hearing on elder financial abuse.

The chair of the Senate Aging Committee, Sen. Susan Collins (R-Maine), is sponsoring the act which she reintroduced last month and is hoping to advance. The legislation cleared the House last year, but stalled in the Senate.

MOST-EGREGIOUS SCAMS

Collins released a report detailing the types of scams that are most commonly reported to the Aging Committee's fraud hotline (855-303-9470).
Topping that list is the so-called IRS scam, where the scammer
impersonates a federal agent and informs the victim that they owe back
taxes, often threatening them with an imminent arrest if they don't
immediately come up with the money, and sometimes coming back for more.

"The criminals who prey on our seniors are relentless," Collins says.
"They will harass seniors over and over again until they have drained
every penny."

The fifth-ranked scam on the committee's list will
sound familiar to many advisers — elder financial abuse, defined as the
"illegal or improper use of an older adult's funds, property or assets."

Often
the perpetrators are close to the victim and occupy a position of
trust, such as caregivers, neighbors or even family members. Like other
forms of exploitation, that kind of abuse often goes unreported, making
reliable numbers on the scope of the problem difficult to obtain. The
GAO has pegged the annual costs of elder financial abuse and fraud at
$2.9 billion a year, while other estimates have put the figure far higher.

Image: Bloomberg News

"The stakes are extremely high," Collins says.

SAFE HARBOR FROM LAWSUITS

The
Senior Safe Act would seek to address the shortfall in reporting abuse
by giving financial companies and their employees a safe harbor from
civil lawsuits if they reported suspected abuse to the appropriate
regulatory, law-enforcement or adult protective services. To invoke that
liability shield, firms would have to administer training to their
employees on spotting signs of elder abuse.
Supporters say that
Collins' bill would provide a much-needed explicit statutory cover to
protect financial firms reporting elder abuse.

A consortium of regulators, including the SEC and FTC, has sought to
clarify an exemption for reporting elder abuse under existing privacy
law. In 2013, that group issued guidance
stating that "reporting suspected financial abuse of older adults to
appropriate local, state, or federal agencies does not, in general,
violate the privacy provisions of the [Gramm-Leach-Bliley Act] or its
implementing regulations."

But many firms have still been
reluctant to establish policies and training programs to spot and report
elder abuse, according to Menio.

"We need to do something to make
them feel better," she says. "We keep pulling out the
Gramm-Leach-Bliley Act and saying you can do this — you're covered. But
they still are not doing it."

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NASGA (National Association to STOP Guardian Abuse, Inc.) is a 501(c)(3) public-interest, civil rights organization formed by victims of unlawful and abusive guardianships and conservatorships. We seek legislative reform of existing law and upgrading of criminal penalties for court-appointed fiduciaries misusing protective proceedings for unjust enrichment and engaging in elder and family abuse.

Our mission is to promote the safety and well being of vulnerable persons subject to injury and damage in their person and property through unlawful and abusive guardianship and/or conservatorship proceedings; to end the growing violations of due process, civil and human rights; to work towards ultimate legislative reform of guardianship as presently practiced; upgrading of criminal penalties for court-appointed fiduciaries misusing protective proceedings for unjust enrichment; and to be a support organization for victims and their families. We carry out our mission through research, outreach, education and advocacy; and going forward, by alliance with community interest, law reform, civil rights and other advocacy organizations.

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